-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WhruE16G/YMD5EZ5Qddue1yHyE94BiRY+xBiSktOp/g9pyaL4QM4nGcOcJrpFJE3 wLmJOIYUqD2tyRGJ9Q17pw== 0001144204-08-030550.txt : 20080519 0001144204-08-030550.hdr.sgml : 20080519 20080519061616 ACCESSION NUMBER: 0001144204-08-030550 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20080519 FILED AS OF DATE: 20080519 DATE AS OF CHANGE: 20080519 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KONGZHONG CORP CENTRAL INDEX KEY: 0001285137 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 000000000 STATE OF INCORPORATION: E9 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-50826 FILM NUMBER: 08843886 BUSINESS ADDRESS: STREET 1: 35F, TENGDA TOWER, STREET 2: NO. 168 XIWAI ST. CITY: HAIDIAN DISTRICT, BEIJING STATE: F4 ZIP: 100044 BUSINESS PHONE: (8610) 8857-5892 MAIL ADDRESS: STREET 1: 35F, TENGDA TOWER, STREET 2: NO. 168 XIWAI ST. CITY: HAIDIAN DISTRICT, BEIJING STATE: F4 ZIP: 100044 6-K 1 v115048_6k.htm REPORT OF PRIVATE FOREIGN ISSUER 6-K
 
 


SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 6-K
 
Report of Foreign Issuer
 
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
 
For the Month of May 2008
 
KONGZHONG CORPORATION
(Translation of registrant’s name into English)
 
35/F, Tengda Plaza, No. 168 Xizhimenwai Street
Beijing, China 100044
(Address of principal executive offices)
 
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F x  Form 40-F o
 
(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ___)
(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ___)
(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
Yes o  No x
 
(If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-___.)
 
 


 
EXHIBITS
 
Exhibit Number
Page
KongZhong Schedules Conference Call for 2008 First Quarter Earnings
4
KongZhong Corporation Reports Unaudited First Quarter 2008 Financial Results
5

FORWARD-LOOKING STATEMENTS

The Press Releases of KongZhong Corporation (the “Company”), constituting Exhibits 1.1 and 1.2 to this Form 6-K, contain statements that may be viewed as “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Such forward-looking statements are, by their nature, subject to significant risks and uncertainties that may cause the actual performance, financial condition or results of operations of the Company to be materially different from any future performance, financial condition or results of operations implied by such forward-looking statements. Such forward-looking statements include, without limitation, statements that are not historical fact relating to the continued growth of the telecommunications industry in China, the development of the regulatory environment, and the Company’s ability to successfully execute its business strategies.
 
Such forward-looking statements reflect the current views of the Company with respect to future events and are not a guarantee of future performance. Actual results may differ materially from information contained in the forward-looking statements as a result of a number of factors, including, without limitation, any changes in the regulatory policies of the Ministry of Information Industry and other relevant government authorities; any changes in telecommunications and related technology and applications based on such technology; and changes in political, economic, legal and social conditions in China, including the Chinese government’s policies with respect to economic growth, foreign exchange, foreign investment and entry by foreign companies into China’s telecommunications market. Please also see the “Risk Factors” section of the Company’s registration statement on Form F-1 (File No. 333-116172), as filed with the Securities and Exchange Commission.


 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
     
  KONGZHONG CORPORATION
 
 
 
 
 
 
Date:  May 16, 2008 By:   /s/ Yunfan Zhou
 
 
Name:  Yunfan Zhou
Title:    Chief Executive Officer
   
   
   
- 3 -

 
EX-1.1 2 ex1-1.htm SCHEDULES CONFERENCE CALL EX 1.1
 
 
EXHIBIT 1.1

KongZhong Schedules Conference Call for 2008 First Quarter Earnings

Beijing, April 29, 2008 - KongZhong Corporation (NASDAQ: KONG), a leading wireless value-added services (“WVAS”) and wireless media company in China, plans to release its 2008 first quarter financial results after the US financial markets close on May 15th, 2008. The Company will host a conference call at 8:30 pm (EST) to discuss the results.
(Speakers)
Yunfan Zhou, Chairman & Chief Executive Officer
Nick Yang, President
Sam Sun, Chief Financial Officer

Hong Kong Time:
May 16, 2008, Friday, 8:30 am
Eastern Time:
May 15, 2008, Thursday, 8:30 pm
Pacific Time:
May 15, 2008, Thursday, 5:30 pm

CONFERENCE CALL ACCESS NUMBERS:
China Toll Free Number:
10-800-130-0399
Hong Kong Toll Free Number:
800-962-844
USA Toll Free Number:
+1-888-679-8018
USA Toll Number:
+1-617-213-4845
PASSCODE:
50513126
Pre registration URL:
 
 https://www.theconferencingservice.com/prereg/key.process?key=P8TAANNJP 

REPLAY ACCESS NUMBERS (FOR 2 WEEKS):
USA Toll Free Number:
+1-888-286-8010
USA Toll Number:
+1-617-801-6888
PASSCODE:
82972731
 
WEBCAST:
http://ir.kongzhong.com/overview.htm

For information, please contact:
Sam Sun of KongZhong Corporation
Tel:
+86-10-8857-6000
Fax:
+86-10-8857-5891
Email:
ir@kongzhong.com
   
   
   
- 4 -


EX-1.2 3 ex1-2.htm CORPORATION REPORTS EX 1.2
 
 
EXHIBIT 1.2
 
KongZhong Corporation Reports Unaudited First Quarter 2008 Financial Results
 
Beijing, China, May 16, 2008 - KongZhong Corporation (NASDAQ: KONG), a leading wireless value-added services (WVAS) and wireless media company in China, today announced its unaudited first quarter 2008 financial results.

First Quarter 2008 Financial Highlights:
l  
Total revenues increased 8% sequentially to $21.39 million, exceeding the Company’s first-quarter revenue guidance of $20 million to $21 million.
l  
Total mobile advertising revenues were $212,000.
l  
US GAAP net income was $0.09 million. Basic earnings per ADS were $0.00. Diluted earnings per ADS were $0.00.
l  
Non-GAAP net income was $0.95 million. Non-GAAP diluted earnings per ADS were $0.03. Non-GAAP Financial Measures are described and reconciled to the corresponding GAAP measures in the section titled “Non-GAAP Financial Measures”.

Commenting on the results, KongZhong’s Chairman and Chief Executive Officer, Yunfan Zhou, said, “Our WVAS revenues increased in Q1 mainly as a result of seasonal factors. However, seasonal factors also resulted in our lower mobile advertising revenues. We expect our mobile advertising revenues to increase rapidly in Q2. In 2008, we will continue pursuing our wireless Internet strategic initiative.”
 
Financial Results:
(Note: Unless otherwise indicated, all financial statement amounts used in this press release are based on US GAAP and denominated in US dollars.)

 
- 5 -

 


WVAS segment
   
For the Three Months Ended
March 31, 2007
(US$ thousands)
 
For the Three Months Ended
December 31, 2007
(US$ thousands)
 
For the Three Months Ended
March 31, 2008
(US$ thousands)
 
WVAS Revenues
             
2.5G:
             
WAP
 
$
4,399
 
$
2,154
 
$
3,060
 
MMS
   
4,130
   
2,797
   
2,868
 
JAVATM
   
693
   
664
   
781
 
     
9,222
   
5,615
   
6,709
 
2G:
                   
SMS
   
8,563
   
7,995
   
9,592
 
IVR
   
1,017
   
4,269
   
2,873
 
CRBT
   
1,197
   
1,591
   
1,971
 
     
10,777
   
13,855
   
14,436
 
Total WVAS revenues
   
19,999
   
19,470
   
21,145
 
WVAS Cost of revenues
   
9,204
   
10,054
   
11,587
 
WVAS Gross profit
   
10,795
   
9,416
   
9,558
 
WVAS Operating expenses
                   
Product development
   
2,275
   
1,965
   
2,189
 
Sales & marketing
   
2,937
   
3,223
   
3,579
 
General & administrative
   
2,167
   
1,568
   
1,648
 
Subtotal
   
7,379
   
6,756
   
7,416
 
WVAS Operating income
   
3,416
 
$
2,660
 
$
2,142
 
                     
WVAS Gross margin
   
54
%
 
48
%
 
45
%
WVAS Operating margin
   
17
%
 
14
%
 
10
%
                   
Total WVAS revenues for the first quarter increased 9% sequentially to $21.15 million, mainly because of an increase in the volume of our services during the holiday season in the PRC. Revenues from 2.5G services accounted for approximately 32% of total WVAS revenues and revenues from 2G services represented the remaining 68%.
 
 
- 6 -

 
 
Revenues from 2.5G services, which include services delivered using wireless application protocol (WAP), multimedia messaging service (MMS), and JAVATM technologies, increased 19% sequentially to $6.71 million. WAP revenues in the first quarter of 2008 were $3.06 million, an increase of 42% sequentially. MMS revenues in the first quarter of 2008 were $2.87 million, an increase of 3% sequentially. JAVATM revenues in the first quarter of 2008 were $0.78 million, an increase of 18% sequentially.
 
Revenues from 2G services, including short messaging service (SMS), interactive voice response (IVR), and color ring back tone (CRBT), increased 4% sequentially to $14.44 million in the first quarter of 2008. SMS revenues in the first quarter of 2008 increased 20% sequentially to $9.59 million. IVR revenues in the first quarter of 2008 decreased 33% sequentially to $2.87 million. CRBT increased 24% sequentially to $1.97 million the first quarter of 2008.
 
The aggregate revenues from China Unicom, China Telecom and China Netcom accounted for approximately 24% of the total first quarter WVAS revenues, while revenues from China Mobile accounted for the remaining 76%.
 
WVAS Cost and Expenses
 
The WVAS cost of revenues in the first quarter of 2008 totaled $11.59 million, an increase of 15% sequentially. WVAS gross margin in the first quarter of 2008 decreased to 45% compared to 48% in the fourth quarter of 2007, mainly as a result of higher revenue sharing with mobile handset manufacturers.
 
Total WVAS operating expenses in the first quarter of 2008 were $7.42 million, an increase of 10% sequentially, mainly because of an increase in compensation to our employees. Product development expenses increased by 11% sequentially and represented 10% of revenues. Sales and marketing expenses increased by 11% sequentially and represented 17% of revenues. General and administrative expenses increased by 5% sequentially and represented 8% of revenues.
 
 
 
- 7 -

 
 
Wireless Internet segment
   
For the Three Months Ended
March 31, 2007
(US$ thousands)
 
For the Three Months Ended
December 31, 2007
(US$ thousands)
 
For the Three Months Ended
March 31, 2008
(US$ thousands)
 
Mobile advertising revenues
 
$
116
 
$
298
 
$
212
 
Other revenues
   
12
   
42
   
29
 
Total Revenues
   
128
   
340
   
241
 
Cost of revenues
   
182
   
166
   
233
 
Gross (loss) profit
   
(54
)
 
174
   
8
 
Operating expenses
   
2,447
   
3,223
   
3,249
 
Operating loss
 
$
(2,501
)
$
(3,049
)
$
(3,241
)
                   
Total mobile advertising revenues, which were mainly generated from KongZhong’s wireless Internet sites, were $212,000 in the first quarter of 2008 as the advertising market is seasonally low in Q1.
 
Operating expenses related to the Company’s wireless Internet sites were $3.25 million, which included $1.84 million in marketing and advertising expenses.
 
The Company’s total headcount increased from 804 as of December 31, 2007 to 817 as of March 31, 2008.
 
Earnings
US GAAP net income totaled $0.09 million in the first quarter of 2008. Basic earnings per ADS were $0.00. Diluted US GAAP earnings per ADS were $0.00 for the first quarter.
Non-GAAP net income in the first quarter of 2008 was $0.95 million. Diluted Non-GAAP earnings per ADS were $0.03 for the first quarter.
 
Balance Sheet and Cash Flow
As of March 31, 2008, the Company had $126.81 million in cash and cash equivalents. Cash in-flows from operating activities totaled $2.32 million in the first quarter of 2008.
 
 
- 8 -

 
 
Business Outlook:
Based on information available on May 16, 2008, the Company expects total revenues for the second quarter of 2008 to be between $22 million and $23 million.

Conference Call:
The Company’s management team will conduct a conference call at 8:30 am Beijing time on May 16 (8:30 pm Eastern time and 5:30 pm Pacific time on May 15, 2008). A webcast of this conference call will be accessible on the Company’s web site at http://ir.kongzhong.com.

 
- 9 -

 

KongZhong Corporation
Condensed Consolidated Statements of Income
(US$ thousands, except percentages, per share data, and share count)
(Unaudited)
 
   
For the Three Months Ended
March 31, 2007
 
For the Three Months Ended
December 31, 2007
 
For the Three Months Ended
March 31, 2008
 
Revenues
 
$
20,127
 
$
19,810
 
$
21,386
 
Cost of revenues
   
9,386
   
10,220
   
11,820
 
Gross profit
   
10,741
   
9,590
   
9,566
 
Operating expense
                   
Product development
   
3,204
   
3,047
   
3,576
 
Sales & marketing
   
4,401
   
5,363
   
5,422
 
General & administrative
   
2,221
   
1,569
   
1,667
 
Subtotal
   
9,826
   
9,979
   
10,665
 
Operating income (loss)
   
915
   
(389
)
 
(1,099
)
Non-operating income
                   
Interest income
   
1,024
   
889
   
1,273
 
Investment income
   
208
   
-
   
-
 
Subtotal
   
1,232
   
889
   
1,273
 
Income before tax expense
   
2,147
   
500
   
174
 
Income tax expense (benefit)
   
585
   
(187
)
 
86
 
Net income
 
$
1,562
 
$
687
 
$
88
 
                     
Basic earnings per ADS
 
$
0.04
 
$
0.02
 
$
0.00
 
Diluted earnings per ADS
 
$
0.04
 
$
0.02
 
$
0.00
 
ADS outstanding (million)
   
35.58
   
35.58
   
35.58
 
ADS used in diluted EPS calculation (million)
   
35.77
   
35.81
   
35.93
 



 
- 10 -

 

 KongZhong Corporation
Condensed Consolidated Statements of Cash Flows
(US$ thousands)
(Unaudited)
 
   
For the Three Months Ended
March 31, 2007
 
For the Three Months Ended
March 31, 2008
 
Cash Flows From Operating Activities
             
Net Income
 
$
1,562
 
$
88
 
Adjustments to reconcile net income to net cash
             
provided by operating activities
             
Share-based compensation
   
569
   
671
 
Depreciation and amortization
   
692
   
746
 
Gain on sales of investment
   
(208
)
 
-
 
Changes in operating assets and liabilities
   
(2,466
)
 
810
 
Net Cash Provided by Operating Activities
   
149
   
2,315
 
               
Cash Flows From Investing Activities
             
Proceeds from sales of investment
   
208
   
-
 
Purchase of property and equipment
   
(381
)
 
(328
)
Acquisition of subsidiaries
   
(17,000
)
 
(1,500
)
Net Cash Used in Investing Activities
   
(17,173
)
 
(1,828
)
               
Cash Flows From Financing Activities
             
Proceeds from exercise of share options
   
125
   
-
 
Net Cash Provided by Financing Activities
   
125
   
-
 
               
Effect of foreign exchange rate changes
   
859
   
3,981
 
               
Net (decrease) increase in Cash and Cash Equivalents
   
($16,040
)
$
4,468
 
Cash and Cash Equivalents, Beginning of Period
 
$
131,402
 
$
122,343
 
Cash and Cash Equivalents, End of Period
 
$
115,362
 
$
126,811
 


 
- 11 -

 

KongZhong Corporation
Condensed Consolidated Balance Sheets
(US$ thousands)
(Unaudited)

   
March 31, 2007
 
December 31, 2007
 
March 31, 2008
 
Cash and cash equivalents
 
$
115,362
 
$
122,343
 
$
126,811
 
Accounts receivable (net)
   
14,234
   
14,993
   
15,874
 
Other current assets
   
2,567
   
4,498
   
4,381
 
Total current assets
   
132,163
   
141,834
   
147,066
 
                     
Rental deposits
   
449
   
447
   
465
 
Intangible assets (net)
   
1,809
   
1,266
   
1,132
 
Property and equipment (net)
   
3,128
   
3,427
   
3,357
 
Long-term investment
   
-
   
-
   
1,500
 
Goodwill
   
32,987
   
34,919
   
36,361
 
Total assets
 
$
170,536
 
$
181,893
 
$
189,881
 
                     
Accounts payable
 
$
6,428
 
$
5,597
 
$
7,547
 
Other current liabilities
   
4,774
   
5,697
   
5,420
 
Total current liabilities
   
11,202
   
11,294
   
12,967
 
                     
Non-current deferred tax liability
   
129
   
123
   
147
 
Total liabilities
 
$
11,331
 
$
11,417
 
$
13,114
 
                     
Shareholders’ equity
   
159,205
   
170,476
   
176,767
 
Total liabilities & shareholders’ equity
 
$
170,536
 
$
181,893
 
$
189,881
 
                     
 
 
 
- 12 -

 
 
Non-GAAP Financial Measures
 
To supplement the unaudited condensed statements of income presented in accordance with United States Generally Accepted Accounting Principles (GAAP), the Company uses non-GAAP financial measures (Non-GAAP Financial Measures) of net income and net income per diluted ADS, which are adjusted from results based on GAAP to exclude certain infrequent or unusual or non-cash based expenses, gains and losses. The Non-GAAP Financial Measures are provided as additional information to help both management and investors compare business trends among different reporting periods on a consistent and more meaningful basis and enhance investors’ overall understanding of the Company's current financial performance and prospects for the future.
 
The Non-GAAP Financial Measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. In addition, our calculation of the Non-GAAP Financial Measures may be different from the calculation used by other companies, and therefore comparability may be limited.
 
For the periods presented, the Company's non-GAAP net income and non-GAAP net income per diluted ADS exclude, as applicable, the amortization or write-off of intangibles, gain on sales of investment, and share-based compensation expense.
 
Reconciliation of the Company's Non-GAAP Financial Measures to the GAAP financial measures is set forth below.
 
   
For the Three Months Ended
March 31, 2007
 
 
For the Three
Months Ended
December 31, 2007
 
 
For the Three
Months Ended
March 31, 2008
 
GAAP Net Income
 
$
1,562
 
$
687
 
$
88
 
Gain on sales of investment
   
(208
)
 
-
   
-
 
Share-based compensation
   
569
   
672
   
671
 
Amortization or write-off of intangibles
   
206
   
215
   
189
 
Non-GAAP Net Income
 
$
2,129
 
$
1,574
 
$
948
 
                     
Non-GAAP adjusted diluted net income per ADS ønote 1÷
 
$
0.06
 
$
0.04
 
$
0.03
 

Note 1: The Non-GAAP adjusted net income per ADS is computed using Non-GAAP Net Income and number of ADS used in GAAP diluted EPS calculation, where the number of ADS is adjusted for dilution due to employee share based compensation.
 
 
- 13 -

 

About KongZhong:
KongZhong Corporation is a leading wireless value-added services and wireless media company in China. The Company delivers wireless value-added services to consumers in China through multiple technology platforms including wireless application protocol (WAP), multimedia messaging service (MMS), JAVATM, short messaging service (SMS), interactive voice response (IVR), and color ring-back tone (CRBT). The Company also operates three wireless Internet sites, Kong.net, Ko.cn and cn.NBA.com, which enable users to access media, entertainment and community content directly from their mobile phones.
 
Safe Harbor Statement
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include, without limitation, statements regarding trends in the wireless value-added services, wireless Internet and mobile advertising industries and our future results of operations, financial condition and business prospects. Although such statements are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on them. These statements involve risks and uncertainties, and actual market trends and our results may differ materially from those expressed or implied in these forward looking statements for a variety of reasons. Potential risks and uncertainties include, but are not limited to, continued competitive pressure in China’s wireless value-added services, wireless Internet and mobile advertising industries and the effect of such pressure on prices; unpredictable changes in technology, consumer demand and usage preferences in this market; the state of and any change in our relationship with China’s telecommunications operators; our dependence on the billing systems of telecommunications operators for our performance; the outcome of our investment of operating income generated from the WVAS segment into the development of our wireless Internet segment; changes in the regulations or policies of the Ministry of Information Industry and other relevant government authorities; and changes in political, economic, legal and social conditions in China, including the Chinese government’s policies with respect to economic growth, foreign exchange, foreign investment and entry by foreign companies into China’s telecommunications market. For additional discussion of these risks and uncertainties and other factors, please see the documents we file from time to time with the Securities and Exchange Commission. We assume no obligation to update any forward-looking statements, which apply only as of the date of this press release.
 
KongZhong Contacts
 
Investor Contact:
Media Contact:
Sam Sun
Xiaohu Wang
Chief Financial Officer
Manager
Tel.: +86 10 8857 6000
Tel: +86 10 8857 6000
Fax: +86 10 8857 5891
Fax: +86 10 8857 5900
E-mail: ir@kongzhong.com
E-mail: xiaohu@kongzhong.com
   
   
   
- 14 -


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